The Italian Ambassador accredited to Mozambique, Gianni Bardini, assures that the terrorism that has plagued the northern province of Cabo Delgado since October 2017 does not affect the operations of the Italian petrochemical company, ENI, which operates the Coral Sul FNLG project, but recognises that the situation has a negative impact on other ventures.
He guarantees that the Coral Sul FLNG project, implemented by the concessionaires in Area 4 of the Rovuma Basin, is off the terrorist trail because it is more than 50 kilometres from the coast.
However, the same is no longer true of the Saipem company, which is involved in the TotalEnergies project that has been interrupted for security reasons, Bardini explained in an interview with AIM in Maputo, the Mozambican capital.
Saipem is the Italian company responsible for engineering the Mozambique LNG project and has signed a seven billion dollar deal to implement the project.
“Safety is not a problem for ENI because the project is offshore. The gas is being extracted and liquefied 60 kilometres from the coast via a floating platform. The gas is extracted at a depth of around 2,000 metres and so ENI has never been impacted by the insurgency,” he said.
He explained that it only affects other Italian companies involved with TotalEnergies’ Mozambique LNG project. Some companies, such as Saipem, have stopped and are waiting to resume.
The diplomat referred to Mozambican President Filipe Nyusi’s speech at last week’s report on the nation, where he shared the state of ENI’s operations in the country.
He mentioned that the Coral Sul FLNG floating natural gas platform has already exported 4.48 million tonnes to the global market, the result of 63 shipments since the first one in November 2022.
The Mozambican Head of State, without giving details of how much the country has received in tax revenue from these shipments, pointed to the exploitation of hydrocarbons as the legacy he is leaving the country after two terms in office.
For Nyusi, the operations of Italy’s ENI are a milestone that symbolises the dream of decades and positions Mozambique as a relevant player in the global energy market.
Bardini recognises that there has been significant progress in the fight against terrorism in Cabo Delgado and hopes that the TotalEnergies project, budgeted at more than 20 billion US dollars and interrupted for reasons of (force majeure), will resume as soon as possible to help accelerate the growth of the Mozambican economy.
The diplomat believes that the Mozambican economy will grow in the coming years as a result of the revenues from the gas projects underway in the country, but warns of the burden of public debt, which has reached alarming levels of around 70 per cent of GDP.
For Bardini, the debt is limiting the country’s ability to mobilise other sources of funding in international financial markets, because its level of indebtedness is unbearable.
He pointed out that 92 per cent of the state budget is spent on paying salaries and the cost of debt, both external and internal, leaving only 8 per cent of the budget for investment spending, a factor that slows down the country’s development at all levels.
As a solution, the country must reduce debt levels and seek external funding from concessionary funds or donations.
“At the moment, international funding is not very available. In order to reduce debt, Mozambique must reduce its domestic spending. Only in this way can it regain the trust of international partners, but this won’t be solved overnight,” he warned.
As for bilateral cooperation, he emphasised that it was at a good level, although there was room for improvement. He emphasised the existence in Mozambique of a large Italian community in all the country’s provinces.
AIM
